Backpack has acquired FTX EU and awaiting the MiCA license that will see it resume operations in the region
The cryptocurrency trading empire Sam Bankman-Fried (SBF) FTX EU founded has been sold to Armani Ferrante’s Backpack exchange in an announcement today.
The FTX EU cost Backpack a sum of $32.7 million as the latter looks to expand its footprint in the region. FTX EU had silently shut down in the second half of 2022, adding to a deficit of unregulated offshore exchanges spotted in Europe.
FTX EU Update: What you should know
FTX EU is a MiFID II-licensed European arm of the global FTX exchange. The trading platform repeatedly changed ownership before its parent company’s collapse in November 2022.
As a Digital Assets AG (DAAG), a Swiss company, the platform has an asking price of $323 million as of 2021.
The parent company filed for bankruptcy in December 2022 after about $8 billion hole in its balance sheet. The then CEO, SBF, was found guilty of conspiracy and wire fraud and sentenced to 25 years imprisonment in November 2023.
Part of the bankruptcy filing marked an inconsistency on who to buy the FTX EU arm. The company had attracted several crypto businesses like Coinbase that intended to acquire it in 2022 and 2023 but failed. FTX finally agreed to sell FTX EU to founders for $32.7 million in February 2024.
Before Sam Bankman-Fried ‘s trials, former Alameda engineer Armani Ferrante had raised $20 million to establish Coral company.
He co-founded this with Can Sun, the former General Counsel to FTX, who also testified against Bankman-Fried. Coral then developed Backpack’s wallet and trading tech stack in 2022 Q4.
Notably, when FTX collapsed, most of the funds in the wallets were lost due to the wallet’s exposure.
Backpack Exchange to settle Customers
Backpack Exchange is a crypto trading and digital wallet company approved by the Cyprus Securities and Exchange Commission (CySEC).
As of Q1 2024, Backpack had a valuation of $120 million after securing a license from the Dubai Virtual Assets Regulatory Authority.
Following this acquisition, the first action Backpack would take, according to updates, is to return FTX EU’s customers’ money.
This will help regain customers’ confidence and trust. This acquisition also shows determination to deliver regulated trading solutions around Europe. Backpack EU will go live in Q1 2025 after the company receives the Markets in Crypto Assets (MiCA) approval.
Just like Backpack, other exchanges like Coinbase have also made a strategic acquisition to expand to the EU
This would make them offer crypto-asset services in the EU freely. Backpack would similarly work with Single Euro Payments Area (SEPA) payment systems and wire transfers via European currencies.
These guidelines would protect customers from harm that contributed to the parent firm’s initial collapse.
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